Two of the best stock pickers in the advisory world are reasserting their buy recommendations for Apple Inc. (NASDAQ: AAPL). Jon Markman, editor of Strategic Advantage says, "Apple is one of my favorite ideas for new money right now."
Toby Smith, editor of Changewave Investing notes, "Investors how have one more chance to jump in to Apple before the shares take off for the moon after the launch of the most-anticipated telecommunications device in history -- the iPhone."
Jon Markman notes that in recent years, much of Apple's performance has been driven by the iPod/iTunes phenomenon. Therefore, he says, it's easy to forget about Apple's roots in computing.
But, he suggests, the latest quarter demonstrated how important the Mac lineup remains to the company's bottom line, and how much success it is having selling them.
Markman adds that globally, Apple shipped out 1.5 million Macs during the quarter, which is up a whopping 36% over last year. He says, "This is the highest growth rate in six quarters and is even more impressive considering that this quarter represents the three-month post-holiday doldrums for retail sales."
He adds, "If your jaw hasn't dropped yet, you can also compare this to the PC industry's 10.9% global growth rate or the mediocre 3.6% growth seen here in the U.S. Moreover, margins on these new Macs came in much higher than expected, thanks to super low flash memory costs."
He also looks forward to the new version of Apple's OS X operating system, dubbed Leopard, which he says is set "to pounce by October." Also on the horizon, he notes, is a revamp of the iPod line later this year.
Markman adds, "Look for the addition of wireless connectivity for the iPod, probably in the form of Bluetooth compatibility, and a higher resolution widescreen model to the offerings."
Finally, he notes that the June launch of the eagerly anticipated iPhone is also approaching. He believes the stock is a buy on any dips for my target of $140."
Meanwhile, Toby Smith notes, "I think this baby is still worth accumulating for the incredible profits to come. Apple is a technology superstar that deserves a premium valuation. The company is growing as fast as just about any other established technology firm, incuding Google (NASDAQ: GOOG)."
He notes that if Google can be valued at a forward price-to-earnings ratio of 45, then Apple should be valued at least around 25 times fiscal-year 2008 earnings.
He explains, "If you add up all of the growth we expect to see in Mac computers, Apple TVs and iPods, along with the new iPhone sales, you get approximately $6 per share in cash flow. At 25 times cash flow, you get a share price of $150."
For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.
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